The Biggest Ponzi Scheme on the Planet-The U.S. Government
"American Economic Exceptionalism Explained"                     USAPonzi                                      by John W. White   Mar 29, 2013

Chapter 34 The Rise and Fall of the American Empire
November 22, 2015


The almost miraculous "rise" of the United States of America to a position of global dominance as an economic, political, and military power is legendary and well chronicled. American industriousness, ingenuity, and entrepreneurialism have each played an integral role in the "rise" of the American Empire. But the United States of America did not follow the path of many previous empires (Roman, French, Spanish, Japanese, British, among others) by seeking to maintain near absolute social, political, economic, and military dominance over the territories that comprise the "virtual empire" of the USA.  Prior history has already demonstrated the futility of that approach to Imperialism.


The USA Imperial model has striven for social and political influence while providing significant economic and military assistance to and cooperation with the various countries in the "virtual American Empire". But this too has proven to be a very weak model for maintaining stability of the "American Empire". While the social, political, and economic model of the British Empire was in my view dramatically successful, the dominate military control could not be supported either logistically or economically. This is typically what has led to the fall of other attempts to establish and sustain a global empire.


I contend that the fall of the American Empire will be for basically that same reason.  It is both militarily and economically impossible to sustain even a "virtual empire". The USA has been able to establish military dominance with ingenuity, technology, and apparent economic power but it is proving to be impossible to sustain this military dominance as we have almost by default assumed the role as the global policeman (Germany, Japan, South Korea, Iraq, Afghanistan, Saudi Arabia). We have also chosen, and rightfully so, to not totally destroy military foes we have faced ever since World War II.  WWII clearly demonstrated the total futility and destruction caused by a global war. However I do not predict that this will deter the world from a similar future event.


The economic cost of attempting to be the global policeman without adequate (or any) financial support from the states we are policing has created an ever increasing financial cost that we just cannot support. This is the problem that caused me to establish a website (usaponzi.com) to analyze USAPonzi. LBJ resorted to a corrupt and fraudulent accounting methodology in order to artificially continue our attempt be the global policeman. The cost of the Vietnam War is what prompted LBJ to propose this desperate action and thereby launch "The Biggest Ponzi Scheme on the Planet"  (See Introduction to USAPonzi).


I contend that the implosion of USAPonzi will expose the futility of trying to be the global policeman and will at the same time expose the economic "house of cards" that has produced illusionary prosperity for The United States of America.


The Rise of the American Empire

The rise of the American Empire began with the desire for political and religious freedom from the control imposed by the British Empire. This desire was professed in the Declaration of Independence,  the United States Constitution, and the Bill of Rights and that, coupled with dogged determination, has allowed the U.S. to achieve that freedom and the opportunity to create an independent democratic and now powerful nation.


There have been a series of events, discoveries, inventions, and policies that have contributed to the Rise of the United States as the most dominant global power. Our ability to effectively develop, deploy, and distribute these discoveries, inventions, products and services has been a key differentiating factor for the productivity and prosperity of the United States of America as compared to most other countries.
 

Agriculture
Shipping
Public education

Manufacturing
Railroad
Telegraph
Light bulb
Electrical Distribution System
Discovery of Oil
Automobile
Agriculture automation
Manufacturing automation
Telephone
Radio
Airplane
Home appliances
Social Security
Television
Strong military
Nuclear power
Radar
Atomic Bomb
Socialized healthcare
Rocket
Computer/software
Interstate Highway System
Enhanced Social Benefits
Transistor
Satellite system
Integrated circuit
Inventive Accounting
Global Positioning System
Delivery logistics
Internet
Personal computer
Outsourcing
Smart phone

 

The U.S. Government made a very effective, and I think proper decision, to make sure that most U.S. citizens (now U.S. residents) are able to have access to the most vital of these products and services independent of whether or not they have the financial capability to pay for them. This of course has led to the social benefits that we now receive from the U.S. Government.


The Fall of the American Empire

The problem is that LBJ determined in FY1969 that it would be easier to balance the Government's budget if we offered these social benefits to the poor and underprivileged but not prepay for them, i.e. not fund the social benefit trust fund. LBJ was able to achieve this with "inventive accounting" by continuing to use Cash Accounting after he convinced congress to move to the "Unified Budget". 


As a result of this decision, the U.S. Government now has "virtual debt" of $99.8 Trillion, has made the upper class appear to be super rich, and has no way to continue to pay for the currently promised social benefits to the middle and lower classes since the U.S. Government has not funded the social benefit trust fund.


I predict that the coming financial crisis, caused by the implosion of USAPonzi, and the associated civil unrest that will occur when the general U.S. population and the global population both understand that the U.S. Government has made military commitments and social benefit promises that it cannot keep,  will lead to the dramatic fall of the United States of America from its current position as the dominant military and economic power on the planet.


The current fiscal policy of the U.S. Government has allowed us to appear much more productive and prosperous than we really are. It has allowed us to fill the world with a military capability that we cannot afford. It has allowed us to fill our cities and our countrysides with opulent housing that we cannot afford. It has allowed us to fill our roads with cars that we cannot afford.  It has allowed us to fill our skies with airplanes that we cannot afford. It has allowed us to fill our resorts with entertainment facilities that we cannot afford. It has allowed us to fill our educational institutions with many professors, research programs, buildings, and sports venues that we cannot afford.  It has allowed us to fill our hospitals with healthcare services that we cannot afford.  It has allowed us to fill our pharmacies with medicines we cannot afford. It has allowed us fill our houses with appliances and electronics that we cannot afford. It has allowed us to fill our pockets with smart phones that we cannot afford.  It has allowed us to fill our tummies with food and drink that we cannot afford.


The $99.8 Trillion of counterfeit money that we have confiscated from the future U.S. taxpayers can  buy a lot of stuff. We are expecting the future U.S. taxpayers to pick up the tab ($99.8 Trillion) for many of these things that we enjoy today and that tab is growing by $16.1 Billion every day.


The U.S. Government now has "virtual debt" of $99.8 Trillion, has made the upper class appear to be 5X richer than they would be with honest accounting, has no way to continue to provide the currently promised social benefits to the middle and lower classes, and has no way financially to continue to fund our current military strategy.


Inventive accounting, a socially and politically correct way to say corrupt and fraudulent accounting, is arguably the biggest differentiating factor that makes the United States of America appear to be more prosperous and productive than most other countries and is the primary factor for holding the fragile American Empire together.  


When the U.S. Government starts using honest accounting, this financial crisis will be evident to everyone and will likely lead to "
The Fall of the American Empire".


Financial data sourced from usdebtclock.org Nov 22, 2015.


Continue to: 
A Disciplined Budgeting Process   Table of Contents